More is less? Wealth effects of Italian stocks to the increase in allowed voting rights

Bruno Fiesenig and Dirk Schiereck

Finance Research Letters, 2024, vol. 62, issue PB

Abstract: To address the steadily declining numbers of listed companies, several European countries are going to allow the issuance of dual class shares. However, there is skepticism among corporate governance experts whether this is an attractive option to increase the number of IPOs. To evaluate this new rule, the Italian stock market offers a unique natural experiment. We investigate the wealth effect for Italian shareholders to the announcement of this increase in allowed voting rights. Our results show significant negative abnormal returns for firms with dual class shares, thus indicating an aversion of investors towards an asymmetrical distribution of voting rights.

Keywords: Dual class shares; Ownership structure; Event study; Agency theory (search for similar items in EconPapers)
JEL-codes: G32 G38 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S154461232400196X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pb:s154461232400196x

DOI: 10.1016/j.frl.2024.105166

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().